EUR/USD: Profit Taken On Short-Term Strategy, Long-Term Target At 1.1125
EUR/USDMacroeconomic overview: President Donald Trump suffered a stunning political setback on Friday in a Congress controlled by his own party when Republican leaders pulled legislation to overhaul the U.S. healthcare system, a major 2016 election campaign promise of the president and his allies.
House of Representatives leaders yanked the bill after a rebellion by Republican moderates and the party’s most conservative lawmakers left them short of votes, ensuring that Trump’s first major legislative initiative since taking office on January 20 ended in failure. Democrats were unified against it.
House Republicans had planned a vote on the measure after Trump late on Thursday cut off negotiations with Republicans who had balked at the plan and issued an ultimatum to vote on Friday, win or lose. But desperate lobbying by the White House and Republican House Speaker Paul Ryan was unable to round up the 216 votes needed for passage.
The dollar slid to a near two-month low against a basket of currencies on Monday as concerns mounted about the chances of U.S. fiscal stimulus after President Donald Trump’s failure to push through a healthcare reform bill. Trump’s inability to deliver on a major election campaign promise raised doubts whether he will be able to push through tax reforms and mega-spending packages.
William Dudley, president of the New York Fed, said delicate interest-rate hikes are necessary given the economy is stable and any further fall in unemployment could lead to an inflation run-up.
St. Louis Federal Reserve Bank President James Bullard on Friday said he would be “okay” with a second rate hike this year, but reiterated his view that the Fed would not need much more to keep inflation in check. Bullard argued Friday the Fed has time to wait and see if fiscal policies give a boost to productivity growth, and thus to overall economic growth, adding that revenue-neutral tax reform and deregulation were among policies that could have a positive impact.
San Francisco Fed President John Williams said on Friday that the Federal Reserve is not trying to push inflation higher to compensate for years of weak price increases, but aiming instead to ensure its 2% target is viewed credibly. He added that Fed officials’ recent statements that the U.S. central bank was willing to allow above-target price increases were intended to ensure that expectations do not slip.
Technical analysis: The EUR/USD bullish trend is continued. The rate is testing the resistance at 1.0872, December’s high. A break above this level would open the way to at least 1.0976 (50% fibo of May-January drop). An ambitious bulls’ target is 1.1125 (61.8% fibo).
Short-term signal: We have taken profit on our short-term long position. We will be looking to open another long at 1.0780. Long-term outlook: Our long-term strategy remains intact – we stay long for 1.1125.
Silver: Profit taken on long position Short-term signal: We closed our long position on XAG/USD at 17.93, slightly below our initial target. Long-term outlook remains bullish and we will be looking to buy XAG/USD again on dips. TRADING STRATEGIES SUMMARY: FOREX – MAJOR PAIRS:
Trading Strategies Summary: Forex Major Pairs
FOREX – MAJOR CROSSES:
Trading Strategies Summary: Forex Major Crosses
Precious Metals: Trading Strategies
Source: GrowthAces.com – daily forex trading strategies newsletter